Subsidies

Smart is as smart does. The NDA government’s proposal to build 100 “smart” cities will work only if it can reinvent the very idea of urban growth in a country like India. Smart thinking will require the government to not only copy the model cities of the already developed Western world, but also find a new measure of liveability that will work for Indian situation, where the cost of growth is unaffordable for most.

Does the Indian government’s loud voice in international negotiations produce results? At the recent WTO meet in Bali, the Indian government went all guns blazing to defend the rights of its farmers and to ensure food security for millions of poor. It opposed the Agreement on Agriculture that limits government food procurement at 10 per cent of the value of total production, based on the prices of late 1980s. It said this clause would impinge on its right to offer farmers a supportive price and to procure food stocks for its food safety programme.

India has emerged as a “voice” in climate change and trade negotiations. At the recently concluded trade talks in Bali, the Indian government was insistent that the rights of poor farmers should not be compromised; in climate change it has raised the matter of equity in sharing global atmospheric space. The already industrialised countries say India is obstinate, strident and unnecessarily obstructionist in crucial global debates. The problem is not that India is loud—that it must be.

We were standing in the only street of this small village called Mohda. Located in the forested region of Chhattisgarh, the village had no access to the road and markets. The women of the village surrounded me. They wanted me to know that malaria was a serious problem for them. They wanted something to be done about it. I was taken aback because we were talking about solar energy—the state government had set up a small power station in the village, and we were there to learn more about it. “What’s the connection?” I asked.

If you know that a sector has arrived when it makes for trade wars between countries, then solar energy clearly has. Last year, the US imposed anti-dumping duties on Chinese imports of solar panels; now the EU has proposed the same. The Chinese have in turn threatened that they will take action against European exports of poly-silicon, the material used for manufacturing solar panels. In February this year, the US filed a case against India at the World Trade Organization (WTO) for “favouring sourcing of panels from domestic manufacturers”.

If you know that a sector has arrived when it makes for trade wars between countries, then solar energy clearly has. Last year, the US imposed anti-dumping duties on Chinese imports of solar panels; now the EU has proposed the same. The Chinese have in turn threatened that they will take action against European exports of poly-silicon, the material used for manufacturing solar panels. In February this year, the US filed a case against India at the World Trade Organization (WTO) for “favouring sourcing of panels from domestic manufacturers”.

The power blackout in northern India on two days should not be dismissed or misjudged. Analysts are jumping to conclude that the crisis was foretold. They blame delays caused by environment and forest clearance procedures and demand winding down the regulatory framework so that we can re-energise ourselves. Their other favourite whipping horse is ‘free’ electricity to farmers, which is said to be crippling the state electricity boards. These explanations are naïve and mistaken.

Now that Europe’s debt crisis is unfolding all around us, shouldn’t we question why the world is determined to live beyond its means and not worry how it sabotages our common future? The debt crisis is a mere symptom of a deeper malaise. The fact is that countries, private companies and individual households can run only if they can borrow against their assets and hope that the debt will grow slower than the value of their asset. Most financial analysts will now tell you that this business is doomed because of the Ponzi scheme nature of the loan business, where borrowing is used to speculate to get more loans and so repayment becomes difficult and over time impossible.

Just consider. Every time petrol prices are raised, oil companies end up losing more money. Simply because the price differential between petrol and diesel increases further, and people gravitate towards diesel vehicles. More the use of diesel, more the oil companies bleed. Worse, we all bleed because diesel vehicles add to toxic pollution in our cities, which, in turn, adds to ill health and treatment costs.

Khan Market in boulevard Delhi is said to be the most expensive real estate in India, maybe even in the world. But in this richest shopping destination, buyers do not want to pay for parking their vehicles.